A study by the Retirement Benefits Authority (RBA) has shown the priority areas of retirees once they get their pension.
According to the data from the authority, only 26% of the eligible Kenyan population have pension schemes, with saccos taking a huge share among the schemes.
49% save in SACCOs and 20% in banks, with 5% opting for policies from insurance companies.
The findings of the study indicate that once their pensions are settled, the retirees prioritise decent housing and education for their children.
Sixteen per cent of the pensioners channel their savings to building houses, the same percentage on paying school fees.
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For instance, in 2024, an average of Ksh 28,500 of retirement benefits was used in paying school fees, Ksh 22,700 in settling loans, and Ksh 14,700 on food and household needs.
An average of Ksh 10,229 was spent on rent and Ksh 9,430 on medical cover and insurance.
According to the study, 15% of the pensioners invest their retirement benefits in farming activities, while 14% opt to partake in profit-making businesses.
Elsewhere, 10% purchase land with their benefits, 8% invest it in real estate, and a paltry 2% invest in shares.
According to RBA, about 74% of Kenyans are exposed to old-age poverty owing to their lack of commitment to long-term pension schemes.
To net more pensioners to schemes, RBA recommended a host of policies, including enhancing coverage, providing mechanisms of good governance and sustainability of the benefits, and promoting innovation in the retirement benefits sector.
The authority also proposed early access to the pension by the contributors before their retirement age.
In a bid to diversify investments after payouts, considering that investments like housing get high priority among the pensioners, the RBA is seeking to establish a housing sub-fund for the members when saving for their retirement, and also promote post-retirement medical benefits and old-age care.
Established in 2000, RBA regulates and protects retirement benefit schemes for pensioners.
